Are you are a bargain hunter looking for a way to save money while filing taxes.
FreeTaxUSA (and it’s partner company, TaxHawk) serves up one of the lowest cost tax software products on the market.
The tax software still costs money (unlike the totally free tax software from CreditKarma), but it’s a very cheap solution with enough usability for all but the most complex filers.
Is it right for you? We explain why experienced tax filers (especially those with complicated returns) should definitely consider FreeTaxUSA this year. See how FreeTaxUSA compares to the best tax programs this year, and see how we rank it in our FreeTaxUSA review below.
Quick Summary
- Easy Navigation and Inputs, even for complicated returns
- Very Little Guidance, Best For Self Directed Filers
- Great Pricing
FreeTaxUSA Details | |
|---|---|
Product Name | FreeTaxUSA |
Federal Price | $0 |
State Price | $12.95 per State |
Preparation Type | Self-Prepared |
Promotions | None |
FreeTaxUSA Review Video
FreeTaxUSA - Is it really free?
Free is the name of the software, so it’s got to be free. Right? Not exactly.
With FreeTaxUSA, Federal Tax Filing is indeed free. That includes free federal filing if you’re an entrepreneur, a side hustler, someone with student loans, someone who itemizes, or someone with an HSA. If you’re filing an individual tax return for the IRS, FreeTaxUSA is in fact free.
The gotcha is with state filing. State filing costs $12.95 per state return. This doesn't matter for the seven states that don't require a state tax return, but for everyone else, you're going to be paying a little.
FreeTaxUSA Prices And Plans
FreeTaxUSA has two major pricing tiers, and a few add-ons (such as prior year filing, amended returns, filing, etc.)
This shows the price for the two service tiers. The prices listed below assume that you’ll pay with a credit card (or another payment type). If you want FreeTaxUSA to take the proceeds out of your refund, you’ll owe an additional $19.99 (we don't recommend any type of tax refund advance, even this).
Plan | Free | Deluxe |
|---|---|---|
Best For | All Tax Situations | Priority support with LiveChat (important for last minute filers). |
Federal Pricing | $0 | $6.99 |
State Pricing | $12.95 | $12.95 |
Total Cost | $12.95 | $19.94 |
Navigation
FreeTaxUSA’s navigation is a hybrid between guided and self-guided navigation. Unlike some of the more robust services (for example TurboTax, H&R Block, or TaxSlayer), FreeTaxUSA doesn’t ask detailed questions about your income. You’ll have to know where to enter various bits of information on your own. That said, it does have helpful “question mark” bubbles that can help you find the right place to enter information.
On top of the help bubbles, FreeTaxUSA has a “Where do I enter” link on the right hand side of software. This robust list gives links and information about where to enter every form and topic I could think of.
The deductions and credits section and the other sections tend to be more guided, which most users will find helpful.
FreeTaxUSA’s best Navigation feature is it’s “Summary” section which lists all the information you entered in a single frame. This should make it easy for you to see if you’ve accidentally missed any critical information.
Ease Of Use
Overall, FreeTaxUSA displayed impressive navigation, and helpful information (such as summary screens, and the “Where do I enter?” link). It’s calculators (including depreciation calculators, withholdings calculators, credit calculators and more) were either easy to use, or ran in the background without users needing to touch them.
Despite these many excellent features, FreeTaxUSA is still best for people who have experience filing. People who have no idea how to characterize their income will spend too much time clicking around to figure out the right place to enter information. It’s better to know this from the start. At the end of the day, you need some idea of how to file your taxes to get the most value from FreeTaxUSA.
Knowledge Articles
FreeTaxUSA serves up relevant knowledge articles in a “Top Issues” link on the right hand side of the screen, and it also allows you to search it’s base using a search bar. The articles themselves tended to be an appropriate length, and most included hyperlinks to relevant sections.
Does FreeTaxUSA Support Crypto Investments?
FreeTaxUSA supports users looking to file crypto investments. It has knowledge articles that explain how cryptocurrency investors can file their information.
Users will need to use Coinbase or a similar site to look up their price conversions between cryptocurrency and USD at the time of the sale.
FreeTaxUSA Extras
To get priority support, unlimited amended returns, and audit assistance, you need to upgrade to the Deluxe version of the software.
The cost is just $6.99 (plus the cost of filing your state return).
Is FreeTaxUSA Secure?
FreeTaxUSA has multi-factor authentication. The default version is email, and you are not required to have a cell phone number entered. However, if you want to use text for a multi-factor authentication, FreeTaxUSA allows it.
Who Should Use FreeTaxUSA 2019-2020?
FreeTaxUSA maintains its position as a top tax software choice for bargain hunters. Although it’s not totally free, the functionality is excellent, especially if you have a variety of income sources.
You can’t import forms which makes it a little more cumbersome than H&R Block, TaxSlayer or TurboTax, but it’s also much less expensive than the competition.
Outside of Credit Karma Tax (which does not offer live chat support), FreeTaxUSA is the best bargain for complex filers.
Simple filers may want to use H&R Block’s Free Plan for a better user interface at a lower cost.
FreeTaxUSA should be on the short list for consideration for most tax filers.
Have you used FreeTaxUSA? Let us know your thoughts!
FreeTaxUSA Review
- Navigation - 90
- Ease of Use - 70
- Features and Options - 75
- Customer Service - 75
- Plans and Pricing - 90
Overall
Summary
FreeTaxUSA 2019-2020 is a great bargain tax software option for business owners, side hustlers, and small landlords that don’t need navigation.
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him here and here.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.
You say: “People who have a lot of information to enter (especially active traders and dividend investors) will find the software too cumbersome to use.”
I don’t agree. I have about 15 stock sales for the year and I did not think it was very difficult entering the trades. I have not seen the finished product at this early date but I’m assuming all will be fine.
When we say a active traders or dividend investors – we’re talking 100s of transactions (not just 15, which is small). Also, individuals who use a robo-advisor with tax loss harvesting (like Betterment or Wealthfront) who may end up having 100s of transactions as well. These individuals end up with multiple pages of transactions to enter which can be very challenging to do manually and could lead to errors.
The “Common Income” window does not appear to allow multiple W2 entries if one had multiple employers, or for a joint tax return. Is that the case?
We didn’t encounter that issue. If you’re on the summary income screen, you click edit W2, then near the bottom is “add W2”. That allows you to add multiple W2s.
Unfortunately this was not my experience with FreeTaxUSA. I learned their software is not setup to accurately handled IRA contributions so they may be inaccurately calculating taxes.
Their software does not accurately allow you to report the basis of IRA contributions in Form 8606 Line 1 and allow the following of IRS IRA deduction worksheet options for recording the basis of a nondeductible IRA
So be very careful with this product. Your mileage may vary.
This product is excellent! I have a pretty complex return, which includes 4 or 5 different W2s, Schedule C income from self-employment, interest and dividend income, 2 different kinds of IRAs plus a home office and other expenses, and the program handled this all beautifully. I will say that I am a very experienced filer and have used both Turbo Tax and later H&R Block for years, but I also used to take a year off here and there and file the whole thing on paper, so I generally know where things go and how this works. That being said, this is hardly rocket science and the program gives you a lot of help and gave me clarity in situations where I needed it. I will be using this program from now on, as long as it continues to work like it did for my current (2019) return. The state programs are a little weak, but that is the case with every tax program I use. They just don’t put enough effort into the state programs and you have to do a lot of your own research if your return is involved, which is the case for me. It’s very straight-forward but if you like a lot of hand-holding, this probably isn’t for you. Give it a try and see for yourself.